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Yahoo
3 days ago
- Business
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Globant Reports 2025 Second Quarter Financial Results
LUXEMBOURG, Aug. 14, 2025 /PRNewswire/ -- Globant (NYSE: GLOB) today announced results for the three months ended June 30, 2025. "This quarter, we continued making the strategic investments and bold moves needed to fully align with our new business model. As GenAI adoption accelerates across industries and the AI ecosystem grows in complexity, our market opportunity expands even further. Our pipeline has reached an all-time high of $3.7 billion—up 25% year-over-year—reflecting strong demand for our differentiated offering. At the center of this growth are our AI Pods, subscription model, AI Studios, and Globant Enterprise AI platform, which together define the "golden path" for enterprise-scale GenAI adoption. With our subscription model and AI Pods, we are reinventing the professional services industry—positioning Globant as a full-stack AI company that designs, builds, and integrates technology, platforms, and industry-specific expertise into scalable, outcome-driven solutions", expressed Martín Migoya, Globant CEO and co-founder. "Our second-quarter results underscore the resilience and operational discipline of our business. We delivered revenues of $614.2 million, an adjusted operating margin of 15.0%, and an adjusted diluted EPS of $1.53, reflecting both consistent execution and our ability to adapt in a dynamic market. During the quarter, we complemented our growth trajectory with the execution of strategic investments and a Business Optimization Plan, which included a one-time charge of $47.6 million. This initiative is a vital step toward enhancing our near-term profitability while strategically allocating resources for our AI Pods, subscription model and Globant Enterprise AI, positioning us as a full stack AI-company," explained Juan Urthiague, Globant's CFO. Please see highlights below. Note that reconciliations between IFRS and Non-IFRS financial measures are disclosed at the end of this press release. Second Quarter 2025 Financial Highlights Revenues rose to $614.2 million, representing 4.5% year-over-year growth. IFRS Gross Profit Margin was 35.4% compared to 35.7% in the second quarter of 2024. Non-IFRS Adjusted Gross Profit Margin was 38.1% compared to 38.1% in the second quarter of 2024. IFRS Profit from Operations Margin was 1.0% compared to 9.2% in the second quarter of 2024. Non-IFRS Adjusted Profit from Operations Margin was 15.0% compared to 15.1% in the second quarter of 2024. IFRS Diluted EPS was $(0.05) compared to $0.87 in the second quarter of 2024. Non-IFRS Adjusted Diluted EPS was $1.53 compared to $1.51 in the second quarter of 2024. Other Metrics as of and for the quarter ended June 30, 2025 Cash and cash equivalents and Short-term investments were $174.2 million as of June 30, 2025. Globant completed the second quarter of 2025 with 30,084 Globers, 28,097 of whom were technology, design and innovation professionals. The geographic revenue breakdown for the second quarter of 2025 was as follows: 54.1% from North America (top country: US), 19.7% from Latin America (top country: Argentina), 19.6% from Europe (top country: Spain) and 6.6% from New Markets[1] (top country: Saudi Arabia). Globant's top customer, top five customers and top ten customers for the second quarter of 2025 represented 8.6%, 20.3% and 29.3% of revenues, respectively. During the twelve months ended June 30, 2025, Globant served a total of 981 customers (with revenues over $100,000 in the last twelve months) and continued to increase its wallet share, with 339 accounts generating more than $1 million of annual revenues, compared to 329 for the same period one year ago. In terms of currencies, 64.1% of Globant's revenues for the second quarter of 2025 were denominated in US dollars. 2025 Third Quarter and Full Year Outlook Based on current market conditions, Globant is providing the following estimates for the third quarter and the full year of 2025: Third quarter 2025 Revenues are estimated to be at least $615.0 million, or 0.1% year-over-year growth. This expected growth includes a positive FX impact of 50 basis points. Third quarter 2025 Non-IFRS Adjusted Profit from Operations Margin is estimated to be at least 15.0%. Third quarter 2025 Non-IFRS Adjusted Diluted EPS is estimated to be at least $1.53 (assuming an average of 45.6 million diluted shares outstanding during the third quarter). Fiscal year 2025 Revenues are estimated to be at least $2,445.0 million, implying at least 1.2% year-over-year revenue growth. This expected growth includes a positive FX impact of 25 basis points. Fiscal year 2025 Non-IFRS Adjusted Profit from Operations Margin is estimated to be at least 15.0%. Fiscal year 2025 Non-IFRS Adjusted Diluted EPS is estimated to be at least $6.12 (assuming an average of 45.5 million diluted shares outstanding during 2025). Shareholder Letter, Conference Call and WebcastA shareholder letter will be available in the Investor Relations section of Globant's website. Martin Migoya, Globant's Chief Executive Officer & co-founder, Juan Urthiague, Globant's Chief Financial Officer, and Diego Tártara, Globant's Chief Technology Officer, will discuss the second quarter 2025 results in a video conference call today beginning at 4:30 pm ET. This call will be followed by a live Q&A session. Video conference call access information is: Webcast About Globant (NYSE:GLOB) At Globant, we create the digitally-native products that people love. We bridge the gap between businesses and consumers through technology and creativity, leveraging our expertise in AI. We dare to digitally transform organizations and strive to delight their have more than 30,000 employees and we are present in more than 30 countries across 5 continents working for companies like Google, Electronic Arts and Santander, among were named a Worldwide Leader in CX Improvement by IDC MarketScape report. We were also featured as a business case study at Harvard, MIT and Stanford. We are a member of the Cybersecurity Tech more information, please visit Non-IFRS Financial Measures While the financial figures included in this press release have been computed in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB"), this announcement does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, "Interim Financial Reporting" or a financial statement as defined by International Accounting Standards 1 "Presentation of Financial Statements". The financial information in this press release has not been audited. Globant provides non-IFRS financial measures in addition to reported IFRS results prepared in accordance with IFRS Accounting Standards. Management believes these measures help illustrate underlying trends in the company's business and uses the non-IFRS financial measures to establish budgets and operational goals, communicated internally and externally, for managing the company's business and evaluating its performance. The company anticipates that it will continue to report both IFRS and certain non-IFRS financial measures in its financial results, including non-IFRS measures that exclude share-based compensation expense, depreciation and amortization, acquisition-related charges, business optimization costs, and the related effect on income taxes of the pre-tax adjustments. Because the company's non-IFRS financial measures are not calculated according to IFRS, these measures are not comparable to IFRS and may not necessarily be comparable to similarly described non-IFRS measures reported by other companies within the company's industry. Consequently, Globant's non-IFRS financial measures should not be evaluated in isolation or supplant comparable IFRS measures, but, rather, should be considered together with its condensed interim consolidated statements of financial position as of June 30, 2025 and December 31, 2024 and its condensed interim consolidated statements of comprehensive income for the three and six months ended June 30, 2025 and 2024, prepared in accordance with International Accounting Standard ("IAS") 34, "Interim Financial Reporting". Globant is not providing a quantitative reconciliation of forward-looking Non-IFRS Adjusted Profit from Operations Margin or Non-IFRS Adjusted Diluted EPS to the most directly comparable IFRS measure because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort. These items include, but are not limited to, share-based compensation expense, acquisition-related charges, and the tax effect of non-IFRS adjustments. These items are uncertain, depend on various factors, and could have a material impact on IFRS reported results for the guidance period. Forward Looking Statements In addition to historical information, this release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "should," "plan," "expect," "predict," "potential," or the negative of these terms or other similar expressions. These statements include, but are not limited to, statements regarding our future financial and operating performance, including our outlook and guidance, our pipeline, and our strategies, priorities and business plans. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could impact our actual results include: our ability to maintain current resource utilization rates and productivity levels; our ability to manage attrition and attract and retain highly-skilled IT professionals; our ability to accurately price our client contracts; our ability to achieve our anticipated growth; our ability to effectively manage our rapid growth; our ability to retain our senior management team and other key employees; our ability to continue to innovate and remain at the forefront of emerging technologies and related market trends; our ability to retain our business relationships and client contracts; our ability to manage the impact of global adverse economic conditions; our ability to manage uncertainty concerning the instability in the current economic, political and social environment in Latin America; and other factors discussed under the heading "Risk Factors" in our most recent Form 20-F filed with the U.S. Securities and Exchange Commission and any other risk factors we include in subsequent reports on Form 6-K. Because of these uncertainties, you should not make any investment decisions based on our estimates and forward-looking statements. Except as required by law, we undertake no obligation to publicly update any forward-looking statements for any reason after the date of this press release whether as a result of new information, future events or otherwise. Globant Interim Consolidated Statements of Comprehensive Income(In thousands of U.S. dollars, except per share amounts, unaudited)Six months endedThree Months Ended June 30, 2025June 30, 2024June 30, 2025June 30, 2024 Revenues 1,225,2651,158,539614,180587,461 Cost of revenues (794,394)(746,769)(396,539)(377,912) Gross profit 430,871411,770217,641209,549 Selling, general and administrative expenses (321,238)(306,699)(159,543)(154,585) Net impairment losses on financial assets (6,339)(5,327)(4,660)(3,162) Business Optimization Costs (47,580)—(47,580)— Other operating income and expenses, —1,961—1,961 Profit from operations 55,714101,7055,85853,763 Finance income 1,9232,5279781,402 Finance expense (20,599)(13,502)(10,972)(6,233) Other financial results, net 8615,606(239)532 Financial results, net (17,815)(5,369)(10,233)(4,299) Share of results of investment in associates 6562370 Other income and expenses, net (3,385)10,606(114)595 Profit (Loss) before income tax 34,520106,998(4,466)50,129 Income tax (7,749)(23,044)742(10,104) Net income (loss) for the period 26,77183,954(3,724)40,025 Other comprehensive income, net of income tax effectsItems that may be reclassified subsequently to profit and loss:- Exchange differences on translating foreign operations 80,377(43,013)51,288(24,405) - Net change in fair value on financial assets measured at FVOCI (5,798)1,019(5,798)894 - Gains and losses on cash flow hedges 13,158(13,133)3,000(4,378) Total comprehensive income for the period 114,50828,82744,76612,136 Net income attributable to:Owners of the Company 28,25283,718(2,383)38,658 Non-controlling interest (1,481)236(1,341)1,367 Net income (loss) for the period 26,77183,954(3,724)40,025 Total comprehensive income for the period attributable to:Owners of the Company 109,57430,59841,85011,589 Non-controlling interest 4,934(1,771)2,916547 Total comprehensive income for the period 114,50828,82744,76612,136 Earnings per shareBasic 0.641.94(0.05)0.89 Diluted 0.621.89(0.05)0.87 Weighted average of outstanding shares (in thousands)Basic 44,17743,17244,29843,244 Diluted 45,42444,22044,29844,292 Globant Interim Consolidated Statements of Financial Position as of June 30, 2025 and December 31, 2024(In thousands of U.S. dollars, unaudited) June 30, 2025December 31, 2024 ASSETS Current assets Cash and cash equivalents 167,431142,093 Investments6,81213,992 Trade receivables636,387605,002 Other assets32,09920,420 Other receivables97,58653,939 Other financial assets9,8893,100 Total current assets950,204838,546Non-current assets Investments 2,3982,212 Other assets 5,9894,750 Other receivables 48,86240,784 Deferred tax assets84,53480,811 Investment in associates1,6531,648 Other financial assets 41,24141,403 Property and equipment147,939154,755 Intangible assets358,803377,365 Right-of-use assets104,947122,884 Goodwill1,650,6801,517,252 Total non-current assets2,447,0462,343,864 TOTAL ASSETS3,397,2503,182,410LIABILITIES Current liabilities Trade payables113,271114,743 Payroll and social security taxes payable217,029239,440 Borrowings20,1741,601 Other financial liabilities146,679153,803 Lease liabilities25,96829,736 Tax liabilities22,79736,916 Income tax payable8,8676,520 Other liabilities99231 Total current liabilities554,884582,990Non-current liabilities Trade payables 4,9572,006 Borrowings 409,115290,935 Other financial liabilities 102,036125,651 Lease liabilities 81,39787,887 Deferred tax liabilities29,55529,611 Income tax payable 1,2166,625 Payroll and social security taxes payable 1,7125,187 Provisions for contingencies23,09618,169 Total non-current liabilities653,084566,071 TOTAL LIABILITIES1,207,9681,149,061Capital and reserves Issued capital53,40852,837 Additional paid-in capital1,239,0701,193,029 Other reserves(63,434)(144,756) Retained earnings 891,073862,821 Total equity attributable to owners of the Company2,120,1171,963,931 Non-controlling interests69,16569,418 Total equity2,189,2822,033,349 TOTAL EQUITY AND LIABILITIES3,397,2503,182,410 Globant Cash Flow Data(In thousands of U.S. dollars, unaudited) Three Months Ended June 30, 2025June 30, 2024 Net Income for the period(3,724)40,025 Non-cash adjustments, taxes and others57,88341,788 Changes in working capital(32,281)(71,646) Cash flows from operating activities21,87810,167 Capital expenditures(24,735)(38,155) Cash flows from investing activities(68,763)(60,656) Cash flows from financing activities103,757(17,514) Net increase/decrease in cash & cash equivalents56,872(68,003) Globant Non-IFRS Financial Information(In thousands of U.S. dollars, unaudited)Six months ended Three Months EndedJune 30, 2025June 30, 2024 June 30, 2025June 30, 2024Reconciliation of adjusted gross profit Gross profit 430,871411,770 217,641209,549 Depreciation and amortization expense 22,24115,958 11,0858,525 Share-based compensation expense - Equity settled 13,20312,901 5,5135,759 Adjusted gross profit 466,315440,629 234,239223,833 Adjusted gross profit margin 38.1 %38.0 % 38.1 %38.1 %Reconciliation of selling, general and administrative expenses Selling, general and administrative expenses (321,238)(306,699) (159,543)(154,585) Depreciation and amortization expense 59,59450,507 29,93925,442 Share-based compensation expense - Equity settled 27,66026,714 14,27514,399 Acquisition-related charges (a) 12,20615,584 5,6395,986 Adjusted selling, general and administrative expenses (221,778)(213,894) (109,690)(108,758) Adjusted selling, general and administrative expenses as % of revenues (18.1) %(18.5) % (17.9) %(18.5) %Reconciliation of adjusted profit from operations Profit from operations 55,714101,705 5,85853,763 Share-based compensation expense - Equity settled 40,86339,615 19,78820,158 Acquisition-related charges (a) 38,47732,880 18,87214,736 Business optimization costs (b) 47,580— 47,580— Adjusted profit from operations 182,634174,200 92,09888,657 Adjusted profit from operations margin 14.9 %15.0 % 15.0 %15.1 %Reconciliation of net income for the period Net income for the period 28,25283,718 (2,383)38,658 Share-based compensation expense - Equity settled 40,37839,425 19,35920,077 Acquisition-related charges (a) 54,26626,380 26,30916,440 Business optimization costs (b) 46,453— 46,453— Tax effect of non-IFRS adjustments (31,811)(15,117) (20,035)(8,313) Adjusted net income 137,538134,406 69,70366,862 Adjusted net income margin 11.2 %11.6 % 11.3 %11.4 %Calculation of adjusted diluted EPS Adjusted net income 137,538134,406 69,70366,862 Diluted shares 45,42444,220 45,54544,292 Adjusted diluted EPS 3.033.04 1.531.51 (a) Acquisition-related charges include, when applicable, amortization of purchased intangible assets included in depreciation and amortization expense line on our consolidated statements of comprehensive income, interest charges on acquisition-related indebtedness, external deal costs, acquisition-related retention bonuses, integration costs, changes in the fair value of contingent consideration liabilities, and other acquisition-related costs. We cannot provide acquisition-related charges on a forward-looking basis without unreasonable effort as such charges may fluctuate based on the timing, size, and complexity of future acquisitions as well as other uncertainty inherent in mergers and acquisitions. (b) One-time charges for the three and six months ended June 30, 2025 related to the Company's Business Optimization Program initiated in April 2025. These charges, primarily related to workforce resizing and office reductions, have been excluded from non-IFRS results as these are one-time and unusual in nature. Globant of Supplemental Information (unaudited) Metrics Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Total Employees 29,112 29,998 31,280 31,102 30,084 IT Professionals 27,133 27,927 29,198 29,022 28,097 North America Revenues % 56.3 55.7 55.2 55.5 54.1 Latin America Revenues % 23.0 21.8 20.4 19.6 19.7 Europe Revenues % 16.9 17.6 17.7 18.2 19.6 New Markets Revenues % 3.8 4.9 6.7 6.7 6.6 USD Revenues % 67.1 66.6 64.8 67.2 64.1 Other Currencies Revenues % 32.9 33.4 35.2 32.8 35.9 Top Customer % 8.3 9.1 9.1 8.8 8.6 Top 5 Customers % 21.0 21.0 19.8 20.0 20.3 Top 10 Customers % 30.3 30.1 29.3 29.1 29.3 Customers Served (Last Twelve Months)* 958 969 1,012 1,004 981 Customers with >$1M in Revenues (Last Twelve Months) 329 331 346 341 339 (*) Represents customers with more than $100,000 in revenues in the last twelve months. [1] Represents Asia, Oceania and the Middle East. Investor Relations Contact:Arturo Langa, Globantinvestors@ (877) 215-5230 Media Contact:Gregorio Lascano, Globantpr@ (877) 215-5230 View original content to download multimedia: SOURCE Globant
Globe and Mail
30-07-2025
- Business
- Globe and Mail
Government of Canada partners with United Kingdom to invest in groundbreaking AI alignment research
Investment will pioneer research on safer AI and ensure economic growth OTTAWA, ON, July 30, 2025 /CNW/ - Investing in artificial intelligence (AI) is key to unlocking Canada's prosperity, resiliency and security as well as strengthening the country's leadership. The Government of Canada is committed to scaling up Canada's AI ecosystem, building AI infrastructure, increasing the adoption of AI systems and strengthening trust. In doing so, it is essential to develop AI in a safe and responsible manner so that it benefits all Canadians.
Forbes
02-07-2025
- Business
- Forbes
Beyond Nvidia: 5 Lesser-Known AI Stocks Poised For Growth To Buy Now
Nvidia is not the sole beneficiary of the generative AI boom. Nvidia is the best-known company capitalizing on the generative AI boom that began in 2023, when ChatGPT quickly scaled to over 100 million users. In fact, it was Nvidia's first-quarter 2023 report, which featured a decline in revenue and forecast huge growth, that made me realize a new technology wave was building akin to the internet boom of the 1990s. Nvidia's prospects gave me the kick to write a book, Brain Rush, published last year. Since then I have continued to track publicly-traded companies that benefit from growth in demand for generative AI. In my book I mapped out the generative AI value network, including AI chip producers, data center technology makers, cloud services providers, large language model builders, generative AI application developers and AI business consultants. From this network, I created an index of publicly-traded companies in the generative AI ecosystem. Based on the performance of this index, I have identified five lesser-known AI stocks poised for growth. 5 Lesser-Known AI Stocks Poised for Growth To Buy Now 1. CoreWeave (CRWV) CoreWeave is a New Jersey-based provider of cloud computing services for AI developers and enterprises. Its stock market value has soared 308% since it went public in March. CoreWeave's stock rise can be attributed to the company's torrid revenue growth – up 420% in the quarter ending in March, according to a CoreWeave investor letter. Retail investor interest in the company and partnerships with leading AI companies have also contributed to the stock's performance. Specifically, CoreWeave partners with Nvidia, which Fortune reported invested in CoreWeave before it went public, as well as OpenAI, which makes ChatGPT. CoreWeave is on my list because its exceptional growth exceeded my expectations and its stock-price increase leads the pack of Nvidia peers. Prior to the company's initial public offering, I highlighted key risks – CoreWeave's dependence on a few large customers, the company's heavy debt load and the CEO's lack of experience running a public company. But if the company can keep exceeding high growth expectations, its shares could rise more. 2. Palantir Technologies (PLTR) Denver-based Palantir Technologies provides software to help public and private-sector clients identify trends, detect fraud and optimize operations through big data analytics. It has enjoyed an 81.3% increase in its stock price in the first half of this year. Palantir achieved rapid growth and high profitability. For example, the company's revenue increased 39.3% in the first quarter while generating an impressive 24.2% net profit margin, according to a Palantir investor letter. Why is Palantir on a list of AI stocks? Palantir is one of the few companies that have been able to generate substantial revenue growth from the application of generative AI, as I wrote in February. Indeed with the exception of Nvidia, no other company has achieved such significant growth from generative AI-powered products. What's more, Palantir recently raised its revenue growth forecast for the year from 31% to 36%. In addition to benefiting from government contracts provided by the Trump administration, Palantir stock could be propelled by potential contracts for projects such as the Golden Dome – a U.S. missile shield akin to Israel's Iron Dome. Citi Research analyst Tyler Radke is not all smiles. Investor's Business Daily reported recently that after meeting with Palantir management, Radke wrote, "We continue to have concerns on how Palantir stock can grow into its valuation, especially if magnitude of positive revisions slow or large contracts (Golden Dome) don't materialize as expected." 3. Snowflake (SNOW) Snowflake, a Bozeman, Montana-based provider of data analysis services, has enjoyed a 42.1% increase in its share price during the first half of the year. While Snowflake is unprofitable, the company's revenue grew nearly 26% in the quarter ending in April, CNBC reported. Behind the increase in Snowflake's stock price are successful initiatives to integrate generative AI into the company's products, as well as partnerships with OpenAI and Anthropic, according to CNBC. In addition, Snowflake exceeded investor expectations and raised its growth guidance. Snowflake is growing thanks to its new CEO, Sridhar Ramaswamy, whom I interviewed in May 2024. When Ramaswamy took over as chief executive in February 2024, I was unsure whether he would be as successful as his predecessor, Frank Slootman, who handed over the top job because his successor had a deeper understanding of AI. Since then, Ramaswamy has given Snowflake's generative AI strategy new life. Indeed, I am including Snowflake on my list because a Snowflake manager told me at a conference in San Francisco in May 2025 that Ramaswamy is doing an excellent job of leading the company's AI product development. 4. Meta Platforms (META) Shares of Meta Platforms, the social media parent company of Facebook, Instagram and WhatsApp, rose 23% in the first half of the year. In the first quarter of 2025, Meta reported 16.1% revenue growth and earned a whopping 39.3% net profit margin, according to Meta's investor letter. The company has distinguished itself from rivals by using AI to help digital ad buyers sell more. In addition, Meta's investments in AI-powered products such as Meta AI could become a new growth curve, as I wrote last October. Meta is on my list because the company is betting heavily on AI. Its new 'Superintelligence Labs' unit, led by former Scale AI CEO Alexandr Wang and former GitHub CEO Nat Friedman, could create new growth curves for the company, Barron's reported. However, a note of skepticism is called for because Meta CEO Mark Zuckerberg has bet big in the past – remember the metaverse, which drove the company's name change from Facebook? That bet has produced billions of dollars worth of losses and does not appear poised to pay off. Nevertheless, Meta could surprise me if the company can attract and motivate the talent needed to surpass more focused rivals like OpenAI and Perplexity. 5. Taiwan Semiconductor (TSMC) Shares of Taiwan Semiconductor, which makes the chips Nvidia and others design, have risen 12.3%, increasing steeply, since late April. TSMC grew revenue 41.6% in the first quarter and earned a 43% net profit margin, according to the company's investor letter. While tariff uncertainty and geopolitical instability could threaten TSMC, a long-standing partnership with Nvidia could propel TSMC stock higher. Analysts project growth in TSMC's AI-related revenue as high as 45% annually, with some forecasting a 45% compound annual growth rate through 2030, according to AInvest. If this prediction is realized, investors could benefit from owning TSMC stock. Bottom Line Nvidia is not the sole beneficiary of the generative AI boom. Other companies who play in the AI ecosystem – CoreWeave, Palantir, Snowflake, Meta Platforms and TSMC – may also enjoy big increases in their stock prices. Investors should consider whether to add them to their portfolios.
Forbes
26-05-2025
- Business
- Forbes
Why Most Agentic AI Projects Still Fail At Scale
First it was generative AI, then AGI captured imaginations. Now, it's agentic AI that's keeping the C-Suite up at night, as business leaders look for AI that doesn't just generate responses, but acts, decides and delivers real business value. Boardrooms are obsessing over it, investors are betting on it, decision makers are piloting it and Gartner analysts are projecting that by 2028, a third of enterprise software will include agentic AI — up from just 1% in 2024 — powering 15% of daily business decisions to be made autonomously by that time. But for all the hype, something isn't clicking and most organizations are still stuck in their pilots, many of which never scale into production or end up failing during deployment. For context, 85% of AI projects fail. And when you ask the people building these tools what's really going on, the consistent theme is that while they have AI agents, they don't really have the ecosystem to support them. Aishwarya Singh, SVP of Digital Collaboration Services at NTT DATA, has seen that story unfold up close. 'The biggest economic bottlenecks include the high initial investment in infrastructure and technology, the cost of integrating AI with existing systems and the need for specialized talent to manage and maintain AI systems,' she told me in an interview. In theory, agentic AI should reduce cost and complexity. But in practice, it adds a new layer of both — especially if companies treat it like a product and not a process. 'Many leaders underestimate the time, effort and resources required for successful integration,' Singh said. 'Ignoring this can lead to project delays, cost overruns and suboptimal performance.' Launched in March of this year, NTT DATA's new Agentic AI Services, built with Microsoft's CoPilot Studio and Azure AI Foundry, aim to fix that — not just by deploying agents, but by supporting the entire lifecycle: advisory, build, implementation, monitoring, retraining and optimization. It's AI infrastructure as a managed service, and it's already being deployed internally across the company. 'In our own internal ticketing systems, productivity improved by 50 to 65%,' Singh said. 'We build agents across ticket types and link them together across omnichannel LLMs so that we can layer on new automation consistently via voice, email and chat.' But that lack of infrastructure or ecosystem, as industry experts put it, isn't the only thing holding agentic AI back. Another issue, and perhaps even bigger, is the AI talent deficit. According to a recent Accenture study of 3,400 executives and 2,000 enterprise projects, only 13% of AI initiatives are delivering significant business value. The reason? Companies are spending three times more on technology than on people — and that AI skills gap is showing. 'Talent readiness is one of the biggest barriers to scaling and unlocking value for companies,' said Jack Azagury, group chief executive for consulting at Accenture. 'One can invest in all the available Gen AI tools, but if your employees don't know how or why to use them, the value will simply not be realized.' Singh agrees, noting that this increasingly wide AI talent gap is why NTT DATA is investing in upskilling 200,000 employees and certifying 15,000 GenAI experts this year alone. 'This has also introduced a lot of ideas around how we can leverage this technology to improve our own business performance, which is leading to incredible new innovations,' she said. When you move past the talent debacle, you face another even greater problem in actually deploying AI. A recent working paper from the National Bureau of Economic Research tracked AI chatbot use across 7,000 workplaces and revealed that these chatbots had almost no significant impact on pay or hours worked in any occupation. Despite wide-scale adoption, the study found that on average, AI only saved employees 3% of their time. Of that, just 3 to 7% was passed on as higher compensation. Even more striking is the finding that most employees redirected their saved time toward other tasks, often ones created by the AI system itself — editing AI output, rechecking hallucinated facts, or adjusting for tone. In other words, the technology added more complexity than it removed. That's similar to what IBM also found in a separate study which showed that only 25% of AI projects deliver their expected ROI. And Informatica's most recent report reveals that data quality and integration issues remain the top reason most AI projects fail. The bottom line is that AI agents don't scale because enterprises don't yet know or understand how to scale the surrounding conditions. If you manage to deploy your AI agents successfully, you now have to worry about what happens after deployment. Even the best AI agent needs a team behind it: developers, data stewards, security architects, trainers, ethicists and more. This is where most companies face the biggest challenge, according to Singh — not in deploying an agent, but in managing what happens next. 'Post-deployment, [agent management] involves regular updates, performance tracking, security audits and alignment with evolving business goals,' she told me. 'A significant pain point we are hearing from clients is how to best manage the surge of agentic AI agents within their organizations.' That's exactly where many organizations are flying blind, building AI agents without a strategy for how to keep them running, governed and optimized at scale. To address this growing challenge, Singh noted that NTT DATA is starting to introduce guardian agents and Red Teaming agents — models designed to monitor security, compliance, and operational integrity as agents proliferate across functions — into their managed stack. So what's working? If agentic AI is burdened by all of these complexities, why's there still such hype about it, so much that many companies around the world plan to have an agentic AI pivot? Singh's answer is that in spite of the complexities and setbacks, agentic AI has real-world use cases that offer a glimpse of its potential when properly deployed. 'We are seeing top use cases in IT services, tactical process automation, customer service and multiagent models for more complex tasks like inventory management,' Singh explained. 'Clients can expect a payback period of 6 to 12 months. Productivity gains often become evident within the first few months.' But those results only show up when there's a complete system behind the agent — one that includes change management, talent development, cross-platform integration and ongoing optimization. As Singh noted, companies that succeed are the ones who prototype quickly with tactical use cases, and hyperscaler-aligned teams ready to scale within their existing cloud environments. Agentic AI won't scale because you hired a vendor. It will scale because you built the internal architecture — including technical, organizational and human — to support it. That's the big message for companies planning to scale agentic AI today, according to analysts, projections and several enterprise case studies. Every agentic AI success story starts with getting the basics right — data, talent and infrastructure. And that, said Singh, requires a lot of planning. The question isn't whether companies can scale their agentic AI projects. It's whether they are ready to do what it takes to get it there.
Reuters
26-05-2025
- Business
- Reuters
OpenAI to open office in Seoul amid growing demand for ChatGPT
SEOUL, May 26 (Reuters) - OpenAI will set up its first office in Seoul and has established an entity in South Korea as demand in the country jumps for its ChatGPT service, the company said on Monday. South Korea has the largest number of paying ChatGPT subscribers after the United States, according to OpenAI. OpenAI has also begun hiring staff to support partnerships with the country and expects to announce further details on this in coming months, the company said. "Korea's full-stack AI ecosystem makes it one of the most promising markets in the world for meaningful AI impact, from silicon to software, and students to seniors," Chief Strategy Officer Jason Kwon said in a statement. Earlier this year, OpenAI announced, opens new tab it would develop artificial intelligence products for South Korea with chat app operator Kakao ( opens new tab. Kwon, who is visiting Seoul, is set to hold a meeting with officials from the main opposition Democratic Party and the ruling People Power Party, local media reported.
